The insurer says there will be no change to regular bonus rates.
Friends Provident chief actuary Brian Harrison says: “Bonus rates announced in January of this year reflected investment returns over the whole term of the contract.
“To maintain payouts at January levels we needed annualised returns of around 8 per cent on longer-term policies. However, the estimated return on the fund over the first six months is minus 7.2 per cent.
“Accordingly, to ensure that we are fair to all customers – not just those with current maturing policies – we need to reduce bonus rates now to reflect the fall in underlying investment values.”